Building wealth is actually quite easy. You don’t need to have a lot of riches to accumulate wealth; you just need drive, determination, and discipline. Let’s look at 6 proven wealth building strategies you can put to use today.

Set Your Own Payment Aside Before Anything Else. If you never set aside money before you pay your bills, then you may never get any after these payments. If your employer has a 401(k) or 403(b) plan, enroll in it and set up a reasonable percentage to invest. The money will be deducted before you see your paycheck, so you won’t feel the loss so much. If you can, maximize your contribution.

Save Now. The earlier you start to save, the more money you will accumulate. If you weren’t able to save much until your kids were grown, you can still make up for it until your retirement.

Get Rid of Debt. It’s best not to have any debts when you start building wealth. If your credit card rate is 14% you will find it difficult to find any investment that gives you a return that exceeds that rate. Ideally, you should pay your debts first and implement an investment strategy.

Select The Right Mortgage For You. If you don’t plan on keeping your house for a long time, then you should find an adjustable-rate mortgage because the rate will be lower than a fixed-rate mortgage. Use the amount saved to pay down your mortgage quicker; refinance your home if rates begin to climb.

Build An Emergency Fund. Emergencies can wreck well-laid plans. Set aside up to six months of your income to live on in case catastrophe hits. If you don’t have an emergency fund, you would be likely to take on debt, cash in your retirement accounts, or sell valuable investments. You would have difficulty recovering from this quickly if you do not have a good back-up plan.

Protect Your Assets. You can lose a healthy portfolio if you aren’t properly insured. You have to make sure that your life, health, homeowner, and disability insurance is enough to cover your needs. All it takes is one legal judgment against you to wipe out your assets.

Instance riches come to a few, but most riches are realized after careful planning and effective management of your resources. You can prepare for the future by applying these 6 wealth-building strategies now.

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Buy before it goes up, sell before it goes down – in simplistic terms, that is what timing the market is about, and most of us would want to do this whether investing in bonds, stocks or mutual funds. Investors who know their stock market chops have one or two options – they can incisively time the market, go with a solid investment, or improve his/her rate of return by combining the two options. But to make the long story short, you may want to be careful, because if you want to increase your rate of return by timing the market, this could be a gamble. You will be best advised to always be on the lookout when timing the market, to expect the unexpected, because making an unlucky investment at the wrong time can cost you a smashing return or cost you money at the end of the day.

Timing the market is a two-pronged strategy. And it can be very tricky, for you have to correctly decide on two things – first, when do you sell and second, when do you buy. You can kiss your chances of a good rate of return if you fail to correctly ascertain even one of those factors. Everybody wanting to try this should be aware of the above.

Quick Tip – the stock market, by nature, would go up more often than it would drop.

When stock markets decline they tend to decline very quickly. In other words, a short-term loss would have more gravity than a short-term gain.

It would not take a long time for the majority of the stock market gains to be posted accordingly. You may abjure the bulk of the gains simply by missing even one or two days’ worth of good gains.

Not many investors are good timers. This is why marketing timing should not be the be-all and end-all of your investment game plan – it may help you some and add some value, but there are other techniques that, if used at the right time, involve less risks, guarantee more potential returns and are thus better primed for success.

We shall quickly discuss in this last paragraph the reason why timing is such a challenge for many investors, and the reason is simple – being too emotionally involved in the investment. Investors who invest on emotion tend to overreact: they invest when prices are high and sell when prices are low. Those in the know in the world of business are professional enough to put their hearts on the line, and know how to time their investments in such a way that would be successful, yet the bulk of their rates of return is generated through other strategies such as security selection, for instance. With that said, investors would have a better chance improving their rates of return with a Tactical Asset Allocation – a good one can make market timing work. These are funds designed to increase value, but do not rely on emotional, histrionic market timing – they rely on the transmogrification of the investment mix (bonds, stocks, cash, etc.) and follow stringent rules and regulations.

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Segregated funds were initially developed by the insurance industry to compete against mutual funds. Today, many mutual fund companies are in partnership with insurance companies to offer segregated funds to investors. Some unique benefits that are not available to mutual fund investors are offered by segregated funds.

These are the major benefits that are not offered by the traditional mutual fund but are offered by segregated funds.

A guarantee of principal upon maturity of the fund or upon the death of the investor is offered by segregated funds. This means that even if the market value of the investment has declined, there is a 100% guarantee on the investment at maturity or death, though this may differ for some funds, minus any withdrawals and management fees. Having a maturity of 10 years after your initial investment are most segregated funds.

Segregated funds also offer creditor protection. If you go bankrupt, then creditors won’t be able to access your segregated fund.

Estate probate fees are avoided by segregatd funds upon the death of the investor.

A “frozen option” which allows investors to lock in investment gains is what segregated funds have and this can increase their investment guarantee. During volatile capital markets, this can be a powerful strategy.

Segregated funds also offer the following less important benefits:

A T3 tax slip each year-end is issued by segregated funds and this reports all gains or losses from purchases and redemptions that were made by the investor. This makes calculating your taxes very easy.

Segregated funds can serve as an “in trust account,” which is useful if you wish to give money to minor children, but with some strings attached.

The basis of how long an investor has invested in the fund during the year is where segregated funds allocate their annual distributions on instead of the basis of the number of units outstanding. Because of mutual funds, an investor can immediately incur a large tax bill when a capital gain distribution is declared at year-end if they invest in November.

A lot of marketing and publicity has been surrounding segregated funds as well as how much value should be placed on their guarantee of principle protection. During any 10-year period since 1980, there have only been three very aggressive and specialized funds that lost money in the entire mutual fund universe. This means that there are extremely low chances that you will be losing money after 10 years. It can cost as much as percent per year in additional fees if you decide you need a guarantee.

But these guarantees can be very worthwhile with further market volatility. Don’t forget that most major mutual fund companies also offer segregated funds.

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